Don’t Confuse Activity With Accomplishment by Sam Eder

Many new traders are very active, but without achieving much. They spend a lot of time reading news, taking in analysis, and digesting charts. This keeps them busy, but does not necessarily help their trading at all.

Good trading does not need to require that much time. Instead, your time can and should be devoted instead to writing a trading plan that fits you, working on your psychology, and researching your system.

It takes discipline and self-awareness to stop doing what is not working, and allocate time to things that are much more conducive to your trading success. What could you stop doing that does not help your trading?

Excessive activity leads to overtrading

One of the things that I have noticed when I talk to, or read about, good traders, is that many of the discretionary traders are very selective about when they enter. They only trade their high conviction ideas, or they adjust their position size so that they are trading much smaller on their lower conviction trades.

They don’t play, and they don’t overtrade.

In contrast, excessive activity and a desire to be busy lead to a fair amount of overtrading amongst new traders. They place trades that they don’t strongly believe in, just for the sake of doing something. This chews up their capital.

Then, when the really good trades do come along, they don’t have as much capital as they should, and they are restricted in how much profit they can realistically chase.

This is another reason to be careful about being too active with your trading – it can be quiet wasteful in the long run.